Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs Sterlite Optical Technologies Ltd on 21 July, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I Appeal No. ST/369/10 (Arising out of Order-in-Original No. 15/ST/Commr/2010 dated 15.04.2010 passed by Commissioner of Central Excise Customs & Service Tax, Aurangabad) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) ================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
Commissioner of Central Excise, Aurangabad Appellant Vs. Sterlite Optical Technologies Ltd. Respondent Appearance:
Shri K.S. Mishra, Addl. Commr (AR) for appellant None for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing: 21.07.2015 Date of Decision: 21.07.2015 ORDER NO Per: M.V. Ravindran This appeal is filed by the Revenue against order-in-original No. 15/ST/Commr/2010 dated 15.04.2010.
2. None appeared on behalf of the appellant nor there was any request for adjournment. Since the issue involved in this case is in a narrow compass, we take up the appeal for disposal in the absence of any representation from respondent.
3. Heard learned D.R. and perused the ground of appeal.
4. The issue involved in this case is regarding the service tax liability on an amount paid by the respondent to various agents appointed as commission agent for procuring export orders for the respondent-assessee. It is the case of the Revenue that such services are taxable under reverse charge mechanism while the adjudicating authority has dropped the proceedings initiated against the respondent-assessee by erroneously interpreting the provisions of Section 68 and Rule 2(1)(d)(iv) of Section 68.
5. We find that the period involved in this case is from 01.04.2003 to 31.3.2007. For the demand of service tax liability under reverse charge mechanism from 01.04.2003 to 18.04.2006 the adjudicating authority is correct in dropping the demands as during the relevant period provisions of Section 66A of the Finance Act, 1994 were not in statute. Provisions of taxing an amount paid by an assessee in India under reverse charge mechanism was brought into statute from 18.04.2006. This law is settled by the Honble High Court of Bombay in Indian National Ship Owners Association 2009 (13) STR 235 (Bom.) and upheld by the Honble Apex Court in 2010 (17) STR J-57. Accordingly, we hold that the impugned order to the extent it drops the proceedings initiated against respondent-assessee upto 18.04.2006 is correct and legal and does not require any interference.
6. In respect of demand post 18.04.2006 the provisions of Section 66A would be applicable in this case and the respondent-assessee is liable to discharge appropriate service tax liability on the amount paid by them as commission to agents appointed abroad for procuring export orders. We uphold that portion of the order which confirms the demand of service tax from 18.04.2006 to 31.3.2007. Since we uphold the demands of service tax liability, the interest liability under Section 75 of the Finance Act, 1994 would also requires to be discharged and we order accordingly.
6. In sum the service tax liability post 18.04.2006 and interest thereof needs to be discharged by the respondent-assessee.
7. As regards the penalties on the amounts which have been confirmed by us we find that the issue involved in this case is of interpretation and during the relevant period the entire issue was being contested upto the Apex Court. Accordingly, though from 18.4.2006 the service tax liability with interest arises, we hold that no penalties are imposable; by invoking the provisions of Section 80 of the Finance Act, 1994.
8. The appeal is disposed of in the above terms.
(Dictated in Court) (C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial) nsk ??
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